Bitcoin Rebounds Above $81,000 as Investors Reassess Rate Outlook Amid AI Stock Sell-Off
Key Takeaways
- •Bitcoin rebounded above $81,000 on Thursday after falling below $80,000 overnight, moving against a 1.5% decline in the Nasdaq.
- •The 10-year Treasury yield fell seven basis points to 4.98%, dropping below the 5% threshold, while the two-year yield declined 7.5 basis points to 4.66%.
- •Market-implied odds of a December rate hike slipped below 80% after nearing 90% the previous day.
- •US-listed spot Bitcoin ETFs recorded about $424 million in inflows over three straight sessions, including $176 million on Tuesday, with BlackRock's IBIT dominating flows.
- •Technology stocks with AI exposure suffered steep losses, including a 12% drop for Alphabet, a 23% plunge for ServiceNow, and an 8% decline for Caterpillar partly tied to data-center construction.
Bitcoin climbed back above $81,000 on Thursday, recovering from an overnight plunge below $80,000 even as US equities sold off sharply and Treasury yields retreated from their recent highs.
The move stood in contrast to a bruising session for technology stocks. The Nasdaq fell 1.5% as investors punished companies with anything adjacent to artificial intelligence spending. Alphabet, the parent company of Google, dropped 12% after reporting disappointing results. ServiceNow plunged 23% after missing forecasts, and Microsoft lost about 1% despite actually beating estimates. Caterpillar fell 8% after narrowly missing revenue expectations, a shortfall attributed in part to its exposure to data-center construction.
Treasury Yields Retreat Below Key Threshold
Bond markets provided a more supportive backdrop. The 10-year Treasury yield fell seven basis points to 4.98%, dipping below the psychologically important 5% threshold, while the two-year yield dropped 7.5 basis points to 4.66%. The 10-year yield functions as a reference rate for borrowing costs across the economy, from mortgages to corporate debt, which is why its level draws broad attention. Odds of a December rate hike slipped below 80% after approaching 90% just one day earlier. Rate expectations are closely watched by investors across risk assets, including cryptocurrencies, because they shape the liquidity conditions under which those assets trade.
Against that backdrop, Bitcoin did something mildly surprising: rather than tracking the Nasdaq straight down, it bounced. Bitcoin has at times in recent years moved in step with technology shares, which is part of why the divergence drew attention. Some capital that fled equities appeared to rotate into crypto, providing what looked like early evidence of demand for Bitcoin during periods of market stress. A single session offers limited proof of a lasting pattern, so how the two behave in the sessions ahead is likely to be watched closely.
ETF Inflows Continue
US-listed spot Bitcoin ETFs logged three consecutive days of inflows, totaling roughly $424 million, with Tuesday alone accounting for $176 million. BlackRock's iShares Bitcoin Trust (ticker: IBIT) continued to dominate. Flow data from these funds is widely tracked as an indicator of institutional participation in the asset class.
Spot Bitcoin ETFs, approved by US regulators and launched in January 2024, hold the cryptocurrency directly and have opened the asset class to a broader pool of institutional and retail investors through conventional brokerage accounts. BlackRock, the world's largest asset manager, operates IBIT.
